State Auditors Triggered Delay on IT Contract Bonus

ByNORBERTO SANTANA, JR. |December 9, 2010

Thursday, December 9, 2010 | Minutes before she called Tuesday’s Orange County Board of Supervisors meeting to order, Chairwoman Janet Nguyen received word that an auditor with the state Controller’s Office was on the phone and wanted a copy of the county’s $266 million IT contract with ACS State and Local Solutions.

That’s why Nguyen yanked approval of the controversial $250,000 bonus for ACS from this week’s agenda. Yet it still remains unclear who called from the Controller’s Office and what they wanted.

A spokesman for State Controller John Chiang said Wednesday that the issue was being researched but with hundreds of auditors in the office, that could take time.

County CEO Tom Mauk, whose office got the contact referral from Nguyen, said his staff has been trying to get in touch with the mystery auditor without any luck. And Mauk thinks the whole thing is some sort of ruse.

“They’ve never returned a call. It’s just a tactic to mess up the works,” Mauk said.

Voice of OC first raised issues about the ACS contract bonus last month, prompting questions about whether such performance incentives should be used in public sector contracts involving taxpayer funds.

Those questions delayed consideration of the contract. And at Tuesday’s meeting, Nguyen mentioned that a undisclosed agency was asking questions, motivating her to once again delay action.

“I thought it was appropriate that if another agency called, we answer their questions,” Nguyen said.

Yet to date, no one knows what those questions were.

Mauk has staunchly defended the bonus for the computer contractor.

“It’s a contractual obligation and I believe in honoring our written obligations. And the bonus, which has not been given in the last two years, is a signal that ACS has stepped up their performance. That improvement should be recognized.”

Yet the buzzword, “bonus” keeps attracting fire from lots of sides, including officials from the Orange County Employees Association and one supervisor.

Nelson agreed that if the company earned the bonus, it should be granted. However, he questioned how employee surveys on the quality of ACS’s work had been structured and conducted. Without any answers, county staff agreed to come back in the future with a full report on how the bonus was structured.

“I think that Supervisor Nelson raised some good questions about the survey and the process by which the county awarded the ACS contract,” said OCEA spokeswoman Jennifer Muir.

“And I think it’s important that the county look at that before they give out a quarter-million-dollar bonus to a company when employees are being laid off and taxpayers continue to struggle in this tough economy.”

Standing with Mauk are a clear majority of county supervisors — Pat Bates, Bill Campbell, Nguyen and John Moorlach — who publicly back the use of performance bonuses in contracts.

“I don’t mind the bonus, said Nguyen. “When you give a bonus. It’s cheaper when you give a bonus instead of locking in a longer term contract and there’s no performance measurements.”

Yet Nguyen said the process has resulted in solid questions being raised about how such bonuses are structured and ultimately granted.

“It’s just good due diligence.”

The discussion will also likely influence the new bidding process for a countywide contractor, Nguyen said.

“Now that this has been brought forward we will be taking a deeper look at the use of such incentives,” she said. “We’ll look at all of that.”

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